Dataquest considers "downgrading" foundry industry as IC market deteriorates
By Mark LaPedus
Semiconductor Business News
(03/16/01 12:30 p.m. PST)
SAN JOSE -- It's hard to believe, but the worldwide silicon foundry business is expected to go from bad to worse.
In recent weeks, major silicon foundry vendors have experienced new--and sometimes record--lows in terms of overall fab-utilization rates and wafer pricing, analysts said.
But the situation is not expected to improve--at least in the near term. The ongoing slowdown in the overall IC industry has prompted Dataquest Inc. to consider downgrading the silicon foundry business for the third time in the last nine months.
Originally, the San Jose-based market researcher last July estimated that the worldwide foundry business would grow about 35% in 2001. Then in January, it lowered its growth forecast to a modest 10%, from $12.9 billion in 2000 to $14.2 billion in 2001.
"I am still on record that we will see 10% growth for the year," said analyst James Hines, who tracks the market for Dataquest. "But I may have to downgrade the forecast given the events in the industry."
Because most, if not all, chip makers have lowered their own forecasts for the quarter, the foundry vendors will also suffering in the market. One of the leading indicators in the foundry business is the fab-utilization rates.
In the middle of last year, major foundry vendors were they fully booked. Some vendors claimed to have fab-utilization rates of more than 100%.
"By the end of last year, we had [fab-utilization] numbers of 85% to 90%, and it's gone down since then," Hines said.
"Now, I've heard [fab-utilization] numbers that are shocking," he said. "I've heard numbers below 50%. That's about the lowest that I can recall."
As a result, wafer prices will come under pressure, especially for leading-edge products based on 0.18-micron design rules, he said. "I would say we could see a 20% to 25% decline or more in terms of wafer prices," he said. |
